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Threadneedle joins multi-asset launch rush with new offering

By: Anna Fedorova | 18 Sep 2012

Threadneedle Investments is the latest global manager to launch a new multi-asset fund, joining the rush to profit from the booming demand for the asset class.

Multi-asset funds were the most popular investment vehicle last year. Data from Lipper shows allocators put €7.3bn worth of new business into European multi-asset mandates last year, when the industry overall suffered €70.5bn net redemptions.

This made multi-asset the only one of six individual fund strategies tracked by Lipper to win more new business than it lost.

Investor appetite for the product has continued this year. European managers have reported continued inflows into their multi-asset solutions.

Standard Life Investments, for example, says it has seen significant inflows into its Global Absolute Return Solutions (GARS) fund this summer, while Baring Asset Management recently announced its multi-asset Baring dynamic asset allocation (DAA) fund has reached over £5bn in assets under management since its launch in January 2007.

Managers have also been strengthening their multi-asset investment teams to ensure their competitive advantage against market peers.

Last month, Barings hired Christopher Mahon as director of asset allocation research in its multi-asset team to replace Toby Nangle, who moved to Threadneedle to head up its $47bn multi-asset division in January.

Nangle will be managing the new Threadneedle (Lux) Multi Asset Target Alpha Fund, together with Matthew Cobon, head of interest rates and currency.

Campbell Fleming, global head of distribution, said: “The launch of the fund comes in response to increasing investor demand for unconstrained active multi-asset strategies designed to control volatility of returns in a more uncertain market environment.”

Threadneedle’s multi-asset range already makes up 40% of its total assets under management.

The new fund offers global exposure across a range of asset classes, aiming to produce positive returns in all market environments. It will be managed actively using an unconstrained, flexible approach to exploit pricing differences between asset classes whilst containing downside risks.

Nangle commented: “As the future of the global economy is uncertain, and unconventional measures are being used to manage capital flows, active multi-asset mandates offer ways to explore how to balance risk and return more effectively.”

The fund will invest in traditional securities and gain indirect exposure to other assets through other funds or by using derivatives. It may also use short selling and leverage.

The target annual return is three month US dollar LIBOR + 5%, combined with a target annualised volatility of 6-10%.

The fund has been registered for public offer in Austria, France, Germany, Luxembourg, the Netherlands, Spain, Sweden, Switzerland and the UK. Approval is pending in other jurisdictions.